The Radio Equalizer: Brian Maloney

29 February 2008

Citadel's Financial Troubles Threaten Talk Radio

RED ALERT

Talk Radio Operator Citadel Reports Shocking Q4 Loss





*** UPDATES: STOCK PRICE COLLAPSING, NYSE HALTS TRADING***
*** Trades Report Substantial Layoffs Are Expected ***
*** Developing: WABC Layoffs Begin, All WJZW-FM Staffers Dismissed ***
*** Large-Scale Atlanta Layoffs ***
*** Major Redundancies Hit DC - All Access: WMAL Cuts, Chris Core Fired***
*** Staffers: Send Confidential Tips To Radioequalizer (at) aol.com ***
*** John Gambling Fired At WABC ***
*** Sackings Hit West Coast: LA, SF ***
*** Report: KABC's Peter Tilden Let Go ***
*** WLS Chicago "Bloodbath" ***
*** KGO, KSFO Expected To Be Hit Next ***


In what must be an unnerving development for a number of the nation's top talk show hosts, station owner Citadel reported devastatingly bad earnings this morning.

Confirming the worst fears (and then some) of broadcast industry insiders, CDL reported a stunning fourth- quarter loss of $3.24 a share, against Wall Street's expectation of a 7 cent profit, according to the AP.

Meanwhile, expenses grew and sales came in below expectations, according to the wire service:


Operating expenses grew to $1.29 billion from $103.1 million as asset impairment and disposal charges surged to $1.1 billion from $24.3 million in the year-ago period. The company said the asset impairment charges are related to a continued deterioration in the radio marketplace and a decline in the company's share price.

Sales for the period ended Dec. 31 more than doubled to $245.5 million from $114 million mostly due to the June acquisition of ABC Radio Holdings Inc. from Walt Disney Co. for nearly $2 billion in cash and stock.

Analysts expected sales of $246.5 million.


Because Citadel now owns ABC Radio, this places the nation's biggest news-talk outlets in a precarious position, even while ratings are as strong as ever and even poised to break records during this white- hot election year.

The Las Vegas- based company owns WABC/ New York, KABC/ Los Angeles, WLS/ Chicago, KGO-KSFO/ San Francisco, WBAP/ Dallas, WJR/ Detroit and many other mega- talkers nationwide. But the longtime operator of small and medium- market outlets seems to have bit off more than it could chew with the ABC acquisition.

In addition, it hasn't brought needed programming expertise to ABC's stations. Instead, Citadel CEO Farid Suleman pushed for an expensive deal with aging talker Don Imus, but a planned push to place Imus on its stations nationwide mysteriously didn't come to pass.

So far, Citadel has avoided slashing its workforce, but cuts seem inevitable, even if they aren't likely to do much to slow the firm's continuing collapse.

Today, CDL shares are down 10 cents to $1.26 per share, after a 20-cent drop yesterday. About an hour ago, Citadel hit an all- time low on Wall Street. In 2003, it was trading over $22 a share.

We have previously covered Citadel's troubles here and here.


UPDATE: CDL shares now trading at $1.22, down 14 cents and hitting a new all- time low.

UPDATE: sell-off continues, now down 17 cents to $1.19.

UPDATE: it's getting worse, now down 26 cents to $1.10. How soon will it close below $1?

UPDATE: at 11:47, now collapsing further, down 31 cents to $1.05.


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3 Comments:

  • When you only run wing nut radio, the only advertisments you can sell are the free ones where sponsers pay per response from the 800#, direct response advertising is all RNC radio attracts. No shock, the format is catching up with the suits, it is a money LOSER.
    The wing nut audience is a low profile, undesirable(for advertisers) group of people over 60, Brian this is the reality of it all.
    I know from experince limbaugh advertising is based on per- response for the most part.

    My firm ran advertisments, when we got no calls, we paid nothing, and usually Limbaugh on 2000 stations only drew an astonishing 20 calls per 60 second spot. Horrible

    Do you really think Imus is what broke them?
    ....lack of selling high profile advertisments is doing them in.

    time to dump paleo-con wing nut radio forever, it is a DUD

    By Blogger Minister of Propaganda, at 29 February, 2008 13:34  

  • "Wing nut radio...."

    That would be Mike Malloy, Randi Rhodes, Sam Seder...

    By Anonymous Anonymous, at 01 March, 2008 15:51  

  • They all have jobs, though.

    John Gambling and George Weber do not.

    That's the way the ball bounces...

    By Anonymous hashfanatic, at 01 March, 2008 18:42  

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